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Workforce Participation: developing a theoretical framework for longitudinal research

RIDLEY-DUFF, Rory and PONTON, Alistair

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RIDLEY-DUFF, Rory and PONTON, Alistair (2012). Workforce Participation: developing a theoretical framework for longitudinal research. In: UK Society for Co-operative Studies Conference 2012, Lincoln University, 2nd/3rd September. (Submitted)

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Workforce participation: developing a theoretical

framework for longitudinal research

Paper / Submission to:

Society for Co-operative Studies Conference

Lincoln, 2nd-3rd September 2012

Abstract

This paper describes an action research methodology and theoretical framework developed

during a pilot study into workforce participation at Viewpoint Research CIC. The study suggests a

set of protocols for generating case studies that describe the framing, operationalisation and

evaluation of workforce participation in organisations. In the paper's conclusions, the authors argue

that the concept of workplace democracy needs reframing to takes account of the level of alignment

between the systems of participations that are desired by workforce members and those designed by

the organisation's managers.

Rory Ridley-Duff: Senior Lecturer, Sheffield Business School

Alistair Ponton: Managing Director, Viewpoint Research CIC

Corresponding author: [email protected]

mailto:[email protected]

Rory Ridley-Duff and Alistair Ponton Workforce Participation

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Introduction

The need for research to inform policy and practice on workforce participation is growing, not only

because of international interest in social enterprise (Borzaga and Defouny, 2001; Kerlin, 2009;

Teasdale, 2012), but also because of a renaissance of the co-operative movement internationally and

locally (Amin, 2009; Co-operatives UK, 2010, 2011). In a UK context, there are ministerial

aspirations for 1 million public sector workers to transfer to mutual and co-operative enterprises by

2015 (Ainsworth, 2011). Furthermore, UK CEOs from both the private and co-operative sectors

have been participating in a wide-ranging review of ownership and participation strategies to reduce

the vulnerability of all types of business to future financial crises (Michie, 2010). The recent

announcement by the UK Government that it will introduce a Co-operatives Act before the end of

this parliament (Mier, 2012) adds to the case for knowledge development that supports comparison

and evaluation of different models of enterprise, and problematises the perceived connection

between workforce participation and effectiveness.

This paper develops a theoretical framework for research on workforce participation by

reviewing the findings of a pilot study undertaken at Viewpoint Research CIC in 2011 (Ridley-Duff

and Ponton, 2011). This pilot was funded by Business Link Innovation Voucher to create

intellectual property that Viewpoint Research CIC could use to extend its range of research

products/services. The pilot study raised the following question:

“How do members of co-operative, social and private enterprises frame, operationalise and evaluate the benefits of workforce participation?”

This overarching question requires detailed investigation of three sub-questions:

RQ1 (Framing) What assumptions inform attitudes to workforce participation?

RQ2 (Operationalisation) How do assumptions about participation shape management practices?

RQ3 (Evaluation) How is workforce participation reviewed by governing bodies?


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This paper does not answer the above questions. Instead, it examines the case for asking them,

the concepts needed to facilitate study of them, and a research design for answering them. It is

divided into five sections. In the first section, we review the literature to make the case for studying

workforce participation. We examine the evidence base that underpins the social economy

assumption that significant or majority ownership of an enterprise by the workforce can address

issues of economic volatility and sustainability in a modern economy. The second section outlines

the philosophical perspective of the researchers and the impact this has on methodology. Section

three provides an account of the creation and testing of a theoretical framework, including a critical

review of the changes made to the framework after the pilot study. The final section reviews the

efficacy of the methodology and theoretical framework for further study of the questions above.

The Case for Studying Workforce Participation

There is now a large body of evidence that workforce participation in management and ownership

impacts on organisation performance and survival. Sustained research into this question started

with the publication of seminal works by Ward (1958) and Vanek (1970). Ward and Vanek

suggested a reformulation of socio-economic thinking to view workforce participation in ownership

and governance as a political rather than property right. This reformulation was grounded in works

that highlight how capitalist production constructs the workforce as a 'cost' rather than a

'beneficiary' of economic activity. For Vanek, viewing the workforce as a 'cost' creates the business

culture within which entrepreneurs and managers learn to distance themselves from production

workers. This reinforces working practices that reduce job security, dehumanized both productive

and managerial work, with the results that exploitation increases and widens social and economy

inequalities. Yanek’s (1970) study of the Yugoslav economy presented the labour-managed firm as

a strategy for re-constructing the workforce as a ‘beneficiary’, ending destructive relationships

between owners, managers and workers, and re-framing business activity as the route to improved

efficiency and welfare (compare Pateman, 1970).


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Some evidence on efficiency changes has been produced by Pérotin and Robinson (2004) in a

set of studies that evaluate the relative performance of investor-led and labour-managed firms.

Building on earlier work by Kruse and Blasi (1997) and Gates (1998), Park et al. (2004) found that

even a 5% ownership stake by the workforce reduces the likelihood of enterprise failure by as much

as 25%. Pérotin (2004) examined survival rates in different contexts and found that labour-

managed firms have strikingly different development characteristics. Unlike investor-led firms,

where survival rates are low in the first year and rise thereafter, labour-managed firms have high

survival rates in years 1 and 2 which then fall in years 3–5 but rise again thereafter. Of significance

is a theoretical conclusion that differences can be accounted for by understanding the maturation of

management systems over time, and the culture of ownership amongst members of the workforce.

These studies, however, were conducted using samples in France, Spain and the transition

economies emerging in Eastern Europe. Evidence from Anglo-American settings is more limited.

Matrix Evidence (2010), however, drew similar conclusions from a review of 58 studies that

compared performance in investor-owned and employee-owned firms. They found that

performance measures were stronger in enterprises with high levels of workforce participation

(irrespective of ownership), and highest of all when workforce participation was combined with

worker-ownership. A further recent study by Lampel et al. (2010) collected primary and secondary

data from nearly 100 employee-owned businesses (EOBs) and compared them to 200 investor-led

firms. They too found different patterns of development, particularly during periods of recession

when EOBs continued to grow while investor-led firms saw no overall growth or contraction. As a

result, critiques of investor-led models of ownership and control, and the alternatives based on

mutuality and employee-ownership, are growing in influence (Spear, 1999; Cook and Deakin, 2002;

Turnbull, 2002; Davies, 2009; Lekhi and Blaug, 2010; Michie and Llewellyn, 2010; Ridley-Duff

and Bull, 2011).

The politics of workforce participation has been theorised in the employee relations literature

(Harley et al., 2005). Hyman and Mason (1995) analyse this phenomenon in detail, critiquing


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employee participation schemes as a defensive strategy by management groups seeking to avoid

mass-protests and trade union action during periods of neo-liberal austerity. Share schemes that

individualise ownership, combined with soft-HRM policies, aim to induce ‘high-commitment’ that

undermines collective action to overturn the investor-led model of enterprise (Marchington, 2005).

Recent financial crises, however, have highlighted the robustness of mutual and labour-managed

firms over time (Erdal, 2011). For the first time in living memory, influential practitioners in the

employee-ownership and co-operative movements report that politicians from all parties are

interested in mutual and co-operative models (Couchman, 2010; Green, 2010).

To contribute knowledge to the field of workforce participation, it is necessary to develop

familiarity with the concepts of involvement and participation. A good summary of their

development have been provided by Hyman and Mason (1995). Involvement is typically passive,

task based, individualised, uni-directional, established by management action, and does not result in

employees acquiring meaningful influence over decision-making. Participation, on the other hand

tends to be active, power-based, established by workforce or government action, is bi-directional,

and involves the mutual shaping of management systems through the interactions of stakeholder

groups (see Vinten, 2001; Harley et al., 2005).

As Hollinshead et al. (2003) point out, practices may be individualised or collectivised, and will

vary in the strategic, operational and financial management issues they cover. Furthermore, as

McKersie et al. (2004, 2008) argue, there is also a theoretical distinction between ‘distributive

bargaining’ in which stakeholders negotiate how benefits produced by an enterprise are distributed,

and ‘integrative bargaining’ in which the values and systems that underpin enterprise development

are embedded in management practices (see Ridley-Duff and Bennett, 2011).

Existing literature suggests, therefore, that investor-led and labour-led firms have different

workforce participation strategies that stem directly from the management values and principles that

are practised. At the same time, there is no common theoretical framework for mapping

participatory practices and their links to different philosophies of management. The next section


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examines the contribution of the pilot study to the development of a theoretical framework for

future research into workforce participation.

Research Philosophy and Methodology

The philosophy that informs this research is communitarian pluralism (Ridley-Duff, 2007).

Communitarian philosophy regards individuality and consciousness as a product of community

relationships that are socially constructed (and reconstructed) over time (Tam, 1999). This being

the case, there is noneutral or impartial way to judge them against a normative standard because

consciousness is viewed as the realisation of throught in a particular socio-historical context.

Pluralism embraces the perspective that diversity in personal, family, community and class interests

will lead to a lack of alignment between the interests of business owners, managers and workforce

members (Fox, 1966; Watson, 1994). The research challenge this creates is how to capture

evidence of divergent interests and their influence on management practices that inhibit or enable

workforce participation.

For this reason, participatory action research (Gill, 1986; Burns, 2007; Gill and Johnson,

2010) was selected as an appropriate approach. It “involves all relevant parties actively examining

together current action…in order to change and improve it” (Wadsworth, 1998: online).

Researchers are not regarded as outsiders – they become a part of the research setting and can be

co-contributors to the reframing of knowledge that informs action (Gill, 1986). They cannot,

therefore, adopt positivist assumptions regarding neutrality, or deploy standardised research

protocols to establish ‘valid’ ‘generalizable’ and ‘reliable’ findings (Guba and Lincoln, 1994).

Participatory action research is best assessed using criteria applied in critical management studies

(Alvesson and Deetz, 2000; Johnson et al., 2006). It can be assessed in terms of the depth of insight

gained after critical reflection with research participants on the value of a research intervention.

The concept of ‘catalytic validity’ has been advanced to assess the extent to which the intervention

facilitates “transformational change and emancipation based on reflexive understanding” in which


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the concepts validity, reliability and generalisability are replaced by an evaluation of the

plausibility, authenticity and insightfulness of the findings (Johnson et al, 2006:147).

The researchers proceeded on the basis that a case study using participatory action research

would generate plausible, authentic and insightful findings (Guba and Lincoln, 1994) sufficient to

build a theoretical framework for further research into workforce participation. The methods

deployed were:

a) a series of discussions amongst board members to identify questions that they believed would stimulate discussion on workforce participation (Stage 1);

b) a ‘draft’ diagnostic survey to collect responses to the questions (Stage 2 or 3).

c) focus groups to discuss the questions asked (Stage 2 or 3);

d) presentation and discussion of the survey and focus group findings to review the questions and their underlying assumptions (Stage 4); and

e) a critical review of the survey research instrument (Stage 5)

In the pilot study, Stage 5 included a critique by two researchers from Sheffield Business

School: Dr Antony Bennett, a Senior Lecturer specialising in Employment Relations and Dr Tracey

Chadwick-Coule, a Senior Research Fellow, specialising in governance in third-sector

organisations. They each offered comments on the design and likely uses to which the research

instrument could be put. A summary of the research approach is provided in Figure 1.


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Figure 1 - Action Research Methodology

Pre-consultation

(Stage 1)

Staff survey

(Stage 2-3)

Staff

discussion

groups

(Stage 2-3)

OD workshop /

Whole system event

(Stage 4)

(Optional)

Re-use survey

instrument

(Stage 6)

Redesign

research

instruments

(Stage 5)

Analysis, design

and reflection

Analysis, design

and reflection

Research Context and Limitations

The researchers in this case are also the directors of the case study company. Viewpoint Research

CIC, established by Alistair Ponton, is a social firm that specialises in survey-based research. Most

income is derived from surveys of housing tenants to assess their satisfaction with housing repairs,

maintenance and management services (see www.viewpoint-research.co.uk). As a social firm,

Viewpoint has a specific commitment to finding and using techniques that enhance the involvement

and participation of people disadvantaged in the labour market. The pilot project, therefore, served

both social and commercial interests: firstly, it provided an opportunity to develop management

systems that could be used to assist staff development at Viewpoint; secondly, it provided an

opportunity to create IP capable of underpinning Viewpoint’s research services.

The next section provides an account of the findings presented in three parts. Firstly, there

are findings on the creation of the research instruments. Secondly, there are findings on the testing

and revision of the research instruments. Lastly, there is an account of the medium term impact of

http://www.viewpoint-research.co.uk/


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the pilot project, including changes to workforce participation that can be traced back to the pilot

study.

Creating the Research Instruments

The drafting of the workforce participation survey was influenced by board level discussion of

academic theories on employee relations (see Hyman and Mason, 1995; Hollinshead et al. 2003).

Hyman and Mason distinguish between involvement and participation, and argue that participation

is an integral component of industrial democracy. Hollinshead et al. (2003), on the other hand,

draws attention to different types of participation: staff might participate financially (through share

ownership), operationally (through consultation and bargaining agreements on working practices),

and in strategy development (through positions on, and influence over, thegoverning bodies).

Discussions initially focussed on the range of ways in which participation might be developed over

time and the length of time this might take (see Morrison, 1991). After three board level

discussions, the following areas for developing a participation strategy had been identified: a) skill

development; b) staff development; c) governance; d) setting terms and conditions of employment;

e) wealth sharing; f) product development, and; g) market development (Ridley-Duff and Ponton,

2011, p. 7). The board formulated the following questions to stimulate further discussion:

1. How should we go about developing staff skills? (Skill Development)

2. How should we go about inducting and appraising staff? (Staff Development)

3. How should we go about making strategic and operational decisions within the company? (Governance)

4. How should we go about setting wages, hours and holiday entitlements? (Terms and Condition)

5. How should we plan and make decisions on bonuses and share dividends within the company?(Wealth Sharing)

6. How should we go about developing the organisation's products and services?(Product Development)

7. How should we go about making plans to develop the market for products and services? (Market Development)

(Pilot Survey Version 1.2, p. 8)


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The design of the research instruments proceeded from an assumptions that insights could

be developed by presenting the questions in focus groups and a workforce survey, and reviewing

theoretical assumptions after use. To provide a basis for making interventions, the survey

instrument needed to do more than describe perceptions of participation – it needed to elicit the

direction of change that people individually and collectively wanted to make. These discussions

were informed by Cornforth et al’s (1988) work on member participation in worker co-operatives as

well as findings from an earlier study of co-operative governance (Ridley-Duff, 2009). Cornforth’s

study noted that desires for participation vary widely and staff can be committed to different types

of participation. Only a minority of members may want to participate in governing bodies, whereas

nearly all members want to participate in decisions on local working practices. Ridley-Duff (2009)

also suggests that a distinction can be made between ‘managed participation’ where participatory

practices are facilitated and controlled by professional managers and ‘democratic participation’

where any member can initiate and organise action to take a decision on a members’ proposal.

Table 1 shows how descriptions of five levels of involvement and participation changed

over the course of the project.

Table 1 – Pre / Post Pilot Descriptions of Levels of Participation

Level Questionnaire 1.2 (Before Fieldwork) - 2010 Questionnaire V1.3 (After Fieldwork) - 2011

1 - No involvement:

a management style where staff do not receive information or instruction from managers, and are not involved in operational or strategic decision-making.

a management style where members/employees are not invited to meetings or elected to management bodies to contribute to operational or strategic decision-making. Typically, staff are not provided with any verbal or written guidance by managers and/or governors before decisions are made.

2 - Passive involvement:

a management style where staff receive information and instruction from managers, but are not involved in operational or strategic decision-making.

a management style where members/employees are provided with both written and verbal guidance by managers and/or governors, but are not invited or elected (individually or in groups) to contribute to operational or strategic decision-making.

3 – Active Involvement:

a management style where staff exchange information and have discussions with managers, but managers make final decisions on operational or strategic issues.

a management style where members/employees (individually or in groups) have discussions about (pre-formed) management proposals, but are not invited or elected to participate in the formation of these proposals, or final decisions about their implementation.


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Level Questionnaire 1.2 (Before Fieldwork) - 2010 Questionnaire V1.3 (After Fieldwork) - 2011

4 - Managed Participation:

a management style where ideas are developed by staff and managers together, and where the managers focus on coaching staff rather than evaluating their proposals (managers may be empowered to veto poor proposals).

a management style where members/employees (individually or in groups) can participate in the development of ideas, and where the managers focus on coaching members/employees to develop their ideas into proposals, and support them during implementation. Managers retain some powers to screen-out weak proposals.

5 - Democratic Participation:

a management style where any person (or group of people) can initiate discussions on operational or strategic issues, arrange and participate in meetings to develop ideas, and exercise their voice/vote when decisions are needed.

a management style where any member/employee (individually or in groups) can initiate discussions on operational or strategic issues, arrange and participate in meetings to develop proposals, and exercise both voice and voting power when decisions are made about implementation.

Ridley-Duff and Ponton (2010, p. 3; 2011, p. 5)

The final stage of drafting the survey instrument involved the development of a matrix in which

the five levels of participation were applied to each of the questions about participation.

Furthermore, if the questions were framed to assess the current situation and identify desired

changes, both focus groups and survey instruments would contribute to establishing priorities for

management action. Each question was asked in two ways: the first form asked participants to give

a view on current practices and levels of participation; the second asked what practices and levels of

participation they desired in the future.

The questions that are asked, and the responses that are developed for them, provide insights

into the ‘framing system’ that an organisation develops to manage involvement and participation

practices. This can be illustrated by showing one of the sample questions from the Viewpoint

survey instrument (see Figure 2). The draft member-employee survey followed this format for all

seven questions with the question order and order of responses randomised to prevent primacy

effects. The survey was completed online by all 14 members of the workforce (100% response) and

a focus group was held at each office (in Sheffield and Leeds) to critically appraise the questions

and solicit staff feedback.


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Figure 2 – A Sample Question From the Pilot Questionnaire

How do you go about making strategic and operational decisions within the company?

No involvement

(Level 1)

Passive Involvement

(Level 2)

Active Involvement

(Level 3)

Managed Participation

(Level 4)

Democratic Participation

(Level 5)

What is the situation now?

I do not participate in meetings, or receive information on what to do. I work it out as I go by asking people.

We have meetings with a manager, and s/he tells me (us) how things should be done.

We have meetings with a manager, and they discuss their proposals with us before making decisions.

We have meetings with our manager, and they listen to our proposals before discussing with us which we should adopt.

Anyone in the group can initiate proposals and organise a discussion on how to run the organisation.

What would you like to do in the future?

I do not need to participate in decision-making – I prefer to ask people how things are done.

I think we should have a meeting with a manager so they can tell us how things should be done.

I think we should have a meeting with a manager, and discuss what they propose before anything is decided.

I think we should have a meeting with management so they can listen to our proposals and help us choose which ones to adopt.

I think anyone should be able to initiate a proposal and organise a discussion on how we run the organisation.

Testing and Revising the Research Instruments

An issue for the researchers at the outset of the project was how to devise a methodology that would

enable the workforce to determine which issues should be given priority. To achieve this, the

results were analysed to assess existing and desired levels of involvement and participation for each

question asked. Figures 3 and 4 show how the responses for existing and desired level of

participation were prepared for discussion at an organisation development (OD) workshop.

Figure 3 suggests that the workforce believed that the organisation operated, or was moving

towards, a consultative management style in 5 of the 7 aspects evaluated. There was a perception

that there was no involvement and participation in decisions on wealth sharing, and only passive

involvement in setting terms and conditions of employment.


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Figure 3 - Existing Levels of Participation

Level 1 Level 2 Level 3 Level 4 Level 5

No Involvement

Passive Involvement

Active

Involvement



Skill Development 2.5

Induction and Appraisal 3.4

Governance 2.6

Terms and Conditions 1.9

Wealth Sharing 1.0

Product Development 2.6

Market Development 3.0

Ridley_Duff and Ponton (2011, p. 7)

Figure 4 – Desired Levels of Participation

Level 1 Level 2 Level 3 Level 4 Level 5

No Involvement

Passive Involvement

Active Involvement



Skill Development 3.5 (+1.0)

Induction and Appraisal 2.8 (-0.6)

Governance 3.4 (+0.8)

Terms and Conditions 2.8 (+0.9)

Wealth Sharing 2.5 (+1.5)

Product Development 3.2 (+0.6)

Market Development 2.9 (-0.1)

Ridley_Duff and Ponton (2011, p. 8)

Group level responses on the desired level of participation in Figure 4 provided a description of

the changes that people sought for each type of participation. Based on these results, a 'democracy

index' was calculated for each aspect of participation by subtracting the results for existing levels of


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participation from desired levels of participation. This was reported back to participants to indicate

where more or less participation was desired:

Wealth Sharing (+1.5)

Skill Development (+ 1.0)

Setting Terms and Conditions of Employment (+ 0.9) Governance (+ 0.8)

Product Development (+0.6) Market development (-0.1)

Induction and appraisal (-0.6)

At focus group discussions, five key issues emerged with the potential to affect the usefulness of

the survey instrument:

1. There was not always a 'correct' answer, and sometimes parts of different answers might have been combined to provide a better answer.

2. Questions could be 'narrow and specific' to the point where they did not seem to relate the situations in which they found themselves at Viewpoint Research CIC.

3. Questions appeared to be more relevant to a co-operative style company than to Viewpoint.

4. Questions may need to be different for people in different roles.

5. Questions may need to be tailored to meet company specific requirements.

These issues were carried forward to the organisation development (OD) workshop and

discussed further. Based on these discussions, the researchers made the following responses in the

final report (Ridley-Duff and Ponton, 2011):

1. Answers could be ranked 1 - 5 (with 1 indicating the most common experience, and 5 indicating the least common), with weightings 40%, 30%, 20%, 10%, 0% to maintain the integrity of the scoring system.

2. No questionnaire instrument can fully cover the range of experiences in a company (this is an inherent weakness of questionnaires and a justification for focus groups). However, free text boxes can be added to enable staff to elaborate / qualify their answers.

3. The five-level responses cover all styles of management from extreme authoritarian approaches to egalitarian cooperative approaches. Including this range of responses was not just for data collection purposes, but also to stimulate thought about the range of participatory practices that can occur in organisations.

4. It seems sensible to reframe responses in terms of involvement and participation in a work group or peer-group as this addresses concerns about the use of the survey instrument in


14

different job roles. The researchers (directors) do not want to arbitrarily reinforce existing social distinctions in the way questions are asked.

5. Questions (and responses) may need to be tailored to a specific company. Indeed, the methodology works most effectively where the introduction of the survey instrument triggers attempts to redefine and update both questions and responses. Where this occurs, it indicates that the action research methodology is increasing the theoretical and practical knowledge of staff members on involvement and participation.

The internal review of the research instruments led to recommendations that variable use of ‘I’

and ‘We’ should be replaced by ‘In my workgroup’, to ensure that each respondent is commenting

on their own, and their immediate colleagues, work experience. For example, the follow text

change was made to the Level 1 response to the question ‘How do you go about developing staff

skills?’

Level 1

(No Involvement)

Questionnaire V1.2 (Pre-Pilot)

Questionnaire V1.3 (Post-Pilot)

What is the situation

now?

I do not participate in meetings, or

receive information on what to do. I

work it out as I go by asking people.

In my work group no internal training

or external courses are provided. We

have to learn as best we can while

doing the job.

What would you like

to do in the future?

In my work group no internal training

or external courses are provided. We

have to learn as best we can while

doing the job.

I think my colleagues and I prefer to

learn on the job. No formal training is

required.

External review by researchers from Sheffield Business School led to a recommendation that

questions to replace the phrase 'should we' with 'would you like'. Below is an example from the

pilot project report:


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1. How should we go about developing staff skills? (Skill Development)

Change to: How would you like to go about developing staff skills?

2. How should we go about inducting and appraising staff? (Induction and Appraisal)

Change to: How would you like to induct / appraise staff?

The rationale behind the (re)wording is two-fold: firstly, that the new wording is more open to

use with both individuals and groups as it can be directed in a group context to either individuals or

the whole group; secondly, the previous wording implies that the response should be framed

collectively ('we') to the exclusion of individual needs/views. The rewording of the questions gives

tacit permission for individual narratives to become part of the debate.

To better interpret variations in the responses, external researchers recommended that

demographic information be collected about respondents' work group / department / position /

gender and ethnicity. It could then be used to explore (and map) patterns of discrimination and

contribute to research on equality of opportunity. However, the collection of this information

remains contingent on the philosophy that guides use of the survey instrument. If the survey

instrument is being used as a heuristic (learning) device for personal development, no demographic

information need be recorded. Only where the survey instrument is used for monitoring and policy

development is demographic information needed.

Secondly, it was recommended that the guidance notes (particularly for focus groups) are

updated to stress that the methodology seeks to understand: what is happening; why it is happening;

what (if anything) members / employees would like to do about what is happening. This matches

the survey instrument questions on ‘what is happening now?’ and ‘what would you like to do in the

future?’

The internal and external review also resulted in three new questions: internal review suggested

splitting questions about induction and appraisal, given that some respondents expressed different

desires in these two areas. Secondly, external review suggested that operational and strategic

management should be split given that a person may have a preference for one over the other.


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Lastly, internal review suggested that there should be something about ‘atmosphere’ to explore

cultural norms that influence workforce members capacity to ask questions about working practices.

These final suggestions resulted in the following 10 questions:

1. Skill Development - “How do you develop staff skills?”

2. Working Atmosphere - “How would you describe the working environment?”

3. Induction Processes - “How do you induct newly appointed (elected) staff?”

4. Staff Appraisal - “How do you approach staff appraisal?”

5. Strategic Management - “How do you plan for the medium and long-term?”

6. Operational Management - “How do you make operational decisions?”

7. Terms and Conditions - “How do you set wages, hours and leave entitlements?”

8. Wealth Sharing - “How are surpluses (profits) and deficits (losses) allocated?”

9. Product/Service Development - “How do you design new products and services?”

10. Market/Business Development – “How do you access and develop markets?”

(Ridley-Duff and Ponton, 2011, p. 15-16)

Medium Term Impacts

In the months following the pilot study, a paper was developed for discussion by the board and

presented for discussion at the company’s annual review in 20th October 2011. Prior to the annual

review, Viewpoint had a single owner-manager (the founder, Alistair Ponton) and a two-person

board (the authors). The paper offered a choice of three options to guide governance practices for

the future:

1) No change

2) A Work’s Council to meet quarterly with an expanded management team.

3) Full membership for staff with elected employee representatives on the board.

In January 2012, staff voted as follows:

Option 1 - 3 Votes

Option 2 - 5 Votes

Option 3 - 4 Votes

With a total of nine votes to increase involvement and participation in governance, the board

eliminated the ‘no change’ option. But with only a minority of the workforce backing ‘full

membership’ and ‘elected directors’, option 2) was adopted instead of option 3). This has been


17

implemented in 2012. The presence of a 'no change' option was considered important to check the

authenticity of the desire for change, and to prevent the imposition of an executive agenda. This

compares with instances where the introduction of employee-ownership has been made without

workforce approval (see Paton, 1989; Erdal, 2009).

Discussion

The findings of the pilot study were reviewed as part of a new proposal for more extensive study of

workforce participation in co-operative, social and private enterprises. This provided an incentive

to identify the key theoretical contributions of the pilot study for future research projects.

Counter-intuitively, it was found that participants believed there was no obvious correlation

between the level of participation and workplace democracy (compare Johnson, 2006). Where high

participation levels were not desired by the workforce, the workforce did not regard those practices

as democratic. Workplace democracy, therefore, was framed (by Viewpoint Research CIC in late

2010) as the extent to which workforce members could shape management systems to reflect the

level of participation they desired. High levels of participation might be viewed as democratic or

undemocratic depending on whether participation (or non-participation) was desired by the

workforce or imposed by executive decision (compare Pateman, 1970).

This lends some support to Cornforth et al’s (1988) argument that staff may want to reduce as

well as increase participation in specific areas. Given the results of the vote on changing

governance practice at Viewpoint Research CIC, a conundrum regarding the nature of democratic

decision-making is brought into sharp focus. Is ‘democratic participation’ a question of maximising

participation in decision-making, or respecting wishes of an electorate to limit their own

participation? If Viewpoint directors had introduced full company membership and elections to the

company board, would this have been more democratic than implementing the option which

received most votes? If a notional concept of ‘democratic participation’ is imposed, does it cease to

be democratic? Can there be a democratic mandate for less participation?


18

These questions echo long-standing concerns expressed in Paton’s (1989) study of ‘reluctant

entrepreneurs’ about the decision-making processes that lead to employee-owned business. The

practices described in Erdal’s (2009) account of the transition to employee ownership at Loch Fyne

Oysters can be contrasted with accounts of transitions in the Mondragon network of worker co-

operatives (see Ridley-Duff and Bull, 2011). At Loch Fyne, the decision to create an employee

trust was taken without the knowledge of the workforce. Only after securing ownership of the

company were the workforce told they were the new owners. In contrast, transitions to co-operative

ownership at Mondragon are taken only after the establishment of shadow democratic bodies that

organise a vote on the transition to co-operative ownership and control.

Erdal (2009, 2011) defends the practice of hiding the initial decision-making process from staff

on the basis of pragmatism (to increase opportunities to transfer control of companies to employee

trusts) as well as the results that are achieved. He argues that staff participation increases as the

ownership structure gradually enables staff to realise benefits from ownership, and notes that this

often takes a period of several years. Paton (1989), however, questions whether survival rates are

linked to democratic participation in the decision to transfer ownership.

The option of 'no change' in this case is, therefore, consistent with concerns that a positive vote

for no change may be important for authenticating the level of democratic support for a course of

action. It certainly led to deep reflection on the part of the authors as a 'no' vote could easily be

interpreted as failure in a managerialist culture. However, irrespective of the outcome of the vote,

the act of taking a collective decision on such a pivotal matter is itself a step change towards

workplace democracy. Indeed, it might be argued that a 'no change' option is necessary.

The research instruments developed during the pilot study open up a theoretical perspective on

workplace democracy based on the alignment of members’ wishes and participatory practices,

rather than practices that maximise participation or management change. The survey instrument –

through the creation of a ‘democracy index’ for each type of participation – can support the

mapping of desires for involvement and participation by location and workgroup. Using this ‘map


19

of democratic desires’, (local) managers and governing bodies can use findings to increase and

decrease participation in specific areas of company operation.

By reorganising the 10 questions in the survey instrument, they can be related to themes in the

employee relations literature about different types of participation, and key differences between

‘integrative bargaining’ and ‘distributive bargaining’ (Hollinshead et al., 2003; McKersie, 2004,

2008). Integrative bargaining relates to the integration of values and principles in the internal

operations of the company, while ‘distributive bargaining’ relates to decisions about the allocation

of resources and wealth to organisation development activities and stakeholders.

Figure 5 – Relating Findings Back to Literatures on Participation

Questions First Level Grouping Second Level Grouping

Skill Development (Q1)

Culture Development

‘Integrative Bargaining’

(Values and principles applied to management practices)

Working Atmosphere (Q2, Q7, Q8)

Staff Appraisal (Q4)

Operational Management (Q6, Q7) Operational Management

Induction Processes (Q1, Q3, Q4) Staff Recruitment and Development

Strategic Management (Q5)

Business Strategies

‘Distributive Bargaining’

(Allocation of power and benefits to organisational stakeholders)

Product/Service Development (Q9)

Market/Business Development (Q10)

Terms and Conditions (Q7) Wealth Sharing Strategies

Wealth Sharing (Q8)

If the relationship between ‘democracy’ and ‘participation’ is more complex, and the link

between them cannot be taken for granted, the label ‘democratic participation’ to describe Level 5

characteristics needs rethinking. A more fitting label might be ‘autonomous participation’ in that

the power to participate belongs to the member and is not ‘managed’ by one or more professional

managers. How, then, should we regard the situations described by Erdal (2009, 2011) in which

owners and/or managers make arrangements for the transfer of ownership to employee trusts? Can

these be unambiguously theorised as examples of ‘no involvement’ in strategic management (at

least at the time of a decision to initiate a transfer of ownership, even if the transfer later facilitates


20

managed and/or autonomous participation? Questions like these can be explored more fully if a

framework is developed that enables the mapping of experiences over time. Indeed, the framework

makes possible further testing of Erdal’s assumption that ‘no involvement’ in employee transfer

decisions might accelerate the introduction of workforce participation in the business community.

Figure 6 – Theoretical Framework for Future Research

Ty

pe

s o

f P

art

icip

ati

on

(Y

-Axi

s)

Dis

trib

uti

ve

Inte

gra

tive

Level of Participation (X-Axis)

Low High

Clarifying

Questions On

No

involvement

(Level 1)

Passive

Involvement

(Level 2)

Active

Involvement

(Level 3)

Managed

Participation

(Level 4)

Autonomous

Participation

(Level 5)

Education, Skills and

Culture development

Operations

management

Staff Recruitment /

Development

Strategic

Choices

Wealth Sharing

Strategies

This discussion has identified a number of concepts that will be useful to future research on

workforce participation. Firstly, it maintains the distinction between ‘involvement’ and

‘participation’ on the basis that ‘involvement’ tends to be management led while ‘participation’ is

workforce or member led. Secondly, a distinction is made between ‘integrative bargaining’ on the

value and principles that inform management practices and the ‘distributive bargaining’ that

influences the allocation of wealth created by an enterprise. Lastly, it clarifies the distinction

between ‘participation’ and ‘democracy’, recognising that there may be a democratic mandate to

both increase and decrease specific types of participation. Figure 6 shows a theoretical framework

that can guide research activity, within which ‘democratic management’ is understood as the

propensity and capacity of management systems to respond to members’ wishes regarding their

level of participation in management decisions. The X-Axis accommodates descriptions of


21

different levels of participation. The Y-Axis, on the other hand, accommodates categories of

questions that are advanced to learn about workforce participation. The questions will vary from

organisation to organisation, but some level of comparison can be made by classifying the questions

on the basis of the concepts introduced to the workforce (see Figure 5). In the conclusions of the

paper, we review the potential of the methodology summarised in Figure 1 and the theoretical

framework presented in Figure 6 for further case study research.

Conclusions

Can this methodology and framework help to answer the questions posed at the start of the paper?

1) What assumptions inform attitudes to workforce participation?

2) How do assumptions about participation shape management practices?

3) How is workforce participation reviewed by governing bodies?

Yin (2002) asserts that producing a series of case studies is a good strategy for developing and

testing theoretical assumptions. The pilot study, therefore, represents a starting point but not an end

point. The methodology developed protocols for case study work on the above questions:

Collecting qualitative data (via focus groups) to solicit workforce perspectives on the types of participation that occur in a given workplace.

Collecting qualitative data (via interviews with board members and/or managers) to understand the assumptions that frame management attitudes to workforce participation.

Use of the above to develop a range of questions and responses to draft a survey instrument that gathers descriptive statistics on existing and desired levels of participation.

Sharing and debating the draft survey instrument and diagnostic survey results (via OD workshops) to develop theoretical knowledge on workforce participation strategies.

This approach will generate empirical data that makes it possible to answer each research

question. The initial focus groups and interviews permit exploration of the assumptions that frame

attitudes to workforce participation (RQ1). The creation of questions and responses for a diagnostic

survey produces documentary evidence of the way members of the workforce frame the relationship

between management practices and workforce participation (RQ2). Lastly, the analysis and sharing

of results in OD workshops stimulates reflection and management action to develop and update

strategies for workforce participation (RQ3). The action research methodology, therefore, generates


22

a diagnostic questionnaire (and qualitative data) that summarises the findings from each case study.

The survey instruments created provide the research data for further theory development on

workforce participation. Data collection at each stage (as well as the final result) directly assists the

answering of each research question, and it does so through deployment of a robust inductive mode

of naturalistic inquiry that is of direct benefit to research participants (Bloor, 1978; Lincoln and

Guba, 1986).

Future research can explore whether co-operative, social and private enterprises put forward

different questions to learn more about the framing systems that guide workforce participation

strategies. For example, it may be expected that co-operative, social and private enterprises may

propose different questions for the Y-Axis (in Figure 6), and that the balance between questions on

integrative and distributive bargaining may vary substantially. The results can be used locally or in

policy development bodies, to explore theoretical assumptions regarding participation strategies and

economic performance. Do co-operatives (or specific types of co-operatives) report higher levels /

or higher aspirations on the X-Axis compared to social and private enterprises? Are performance

differences correlated to particular configurations of participatory management? These are

questions that successful development of the theoretical framework will make it more possible to

answer.

Acknowledgements

The authors would like to thank the staff of Viewpoint Research CIC for their candid feedback during the pilot study, Fergus Lyon and Leandro Sepulveda for guidance in developing the literature review, and the participants of the 2012 UK Society for Co-operative Studies for the feedback on the first draft of this paper.


23

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